Recognized as Europe’s Top Tech Hub by the European Commission, Bavaria is often recognized as an ideal place for companies looking to expand into the European market. It is home to global players including Allianz, adidas, Audi, BMW, IBM Watson, Infineon, and Siemens. Tech giants such as Amazon, Microsoft, Salesforce, Intel, and CISCO have also established regional headquarters and research centers in the region, playing to the strengths of Bavaria’s dominant industries: aerospace, automotive, energy, insurance, finance, logistics, new materials, the life sciences, and healthcare. Foreign companies that aim to service, partner, collaborate, or invest in businesses operating in these industries are flourishing.
But how easy is it for foreign companies to enter Europe’s largest market and set up a subsidiary or branch office in Bavaria? What resources are available to help them get acclimated and ultimately succeed? Anke Corbin, Founder and CEO of Globig, recently spoke with James Mister, West Coast Investment and Expansion Manager for Invest in Bavaria, to learn how they advise and support companies that are interested in doing business in southern Germany, right at the foothills of the Alps.
‘Invest in Bavaria supports companies from the US and abroad from a broad range of sectors on their international expansion strategy, helping them find the ideal location in Bavaria for talent, partners, and clients so that they can be successful right from the moment they settle here.’
In fact, Invest in Bavaria’s purpose is to show companies the region’s myriad benefits and how best to take advantage of what it has to offer.
Following are highlights from the conversation between Anke and James. You won’t want to miss out on this information if you are at all considering Germany, and more specifically Bavaria, for your company’s expansion.
Q: How does Invest In Bavaria view and approach foreign direct investment (FDI)?
A: The Bavarian state government has a very proactive approach to FDI; with 25 representative offices worldwide, including two in the US, we are in close proximity to many companies that want to expand to Europe. Beyond working to attract companies to Bavaria through highlighting the innovation, talent, and support programs offered in the region, the state also works very hard to encourage and support foreign companies after they have established a presence there. Our goal from the outset is to make sure that they understand how to effectively do business in Germany and become integrated into the business, industry, or research network in order to be successful in the long run.
Q: What makes Bavaria attractive to foreign companies?
A: It’s often the case that firms with previous business activities or experience in Germany choose to do business in Bavaria—above any other location in Germany.
Therefore, for those with little or no prior experience in Germany, the right guidance is essential so as not to miss all that Bavaria has to offer. The region remains far and away one of the best places to start, build, and grow a business. For instance:
Bavaria is the economic leader in Germany and across the EU
- #7 economy in the EU(with a GDP of nearly $690B)
- #2 highest Purchasing Power in the EU
- #4 globally for industrial density
- 27% of employment is in manufacturing
- Home to 47% of Germany’s IT companies
- 60,000 companies founded annually
- 50% of annual investments from SMEs
- 100,000+ high-tech startups
- Cluster initiatives with over 5,500 participating companies (more on this later)
- 20 national research institutions
- ~15,000 patent applications per year (32% of Germany’s total)
- 9 universities, 24 universities of applied sciences, and 320,000+ students
Germany’s industrial base is well-known around the world and companies that are interested in working with these industries are attracted to Bavaria. The robust private sector also remains competitive through learning about and latching on to new technologies. In Germany, the private sector embraces the idea that it requires an inflow of disruptors and new ideas to remain competitive. With the government’s support, one of the main goals is to bring in tech companies that will help Bavaria’s automotive, mobility, and insurance industries maintain their competitive edge through innovation, partnering, and new business creation.
Bavaria’s ‘Cluster Initiative’ brings companies and research institutions together. The “Bavarian Cluster Initiative” is a feature of the Bavarian state government’s strategy to enhance Bavaria’s role as a top location for linking applied research to business and industry. Its focus on seventeen areas of science, technology, and engineering has been critical to Bavaria’s success as a technological powerhouse. The Cluster Initiative promotes cooperation between companies and research institutions, aiming to create a dynamic and self-organizing process of growth and development across five areas (Digitalization, Energy, Health, Materials Engineering and Mobility) in 17 fields: sensory technology, mechatronic, medtech and biotech, nutrition, chemistry, nanotechnology, new materials, automotive, aerospace, and energy technology. Each cluster is run by experts with deep knowledge of the industry, together with significant players. They are perfectly positioned to assist new companies with introductions, share the best conferences and events to attend, and generally provide a soft landing.
Bavaria is in the physical center of Europe. It’s just a few hour’s drive or flight to anywhere in Western, Central, or Eastern Europe, and from Munich there are direct flights to a dozen cities across North America and many, direct to Asia. The Munich Airport has been named Europe’s BEST airport 10 times in past 12 years, cementing its role as a state-of-the-art international gateway, offering 240 destinations in 68 countries. Strategically well-placed, it is strengthened by the fact that it has one of the newest and most-updated airports with direct flights to every continent and almost every global city. Germany’s well-connected high-speed rail system also offers fast and efficient service to other cities with a few hours’ train ride. And, of course, if you have a need for speed, Germany’s world-renowned ‘Autobahn’ is built for unlimited speeds.
Quality of Life is often mentioned as a bonus for companies located in Bavaria. Bavarian cities (namely Munich, Nuremberg and Regensburg) rank among the highest globally in many surveys, including the Mercer “Quality of Living” city ranking, Monocle Magazine’s annual list of “Most Livable Cities”, and Conde Nast Traveler’s list of “Best Cities in the World”. The area is a stone’s throw from the Alps and offers quick access to nature, hiking, lakes, winter sports, and all kinds of festivals. People who are interested in culture have access to a number of nearby countries and regions to which travel is convenient, including, Austria, Switzerland, the Czech Republic, Italy, and France, just to name a few. People who have knowledge of the market will choose a region like Bavaria that will play to its company’s strengths, including the potential for clients and partners. They will choose where they’ll get traction and also be able to discover all that Bavaria has to offer on top of its great business environment.
Invest In Bavaria helps companies connect to the business ecosystem, introducing them to relevant networks, service providers, conferences, and events.
Established companies in Bavaria are approachable. While there may be a perception that German corporations are big and unapproachable, it happens that Bavarian global niche players want to be in touch with dynamic, growth-stage companies that are trying to come up with specific solutions to innovation gaps or technological challenges. Executives from large corporations attend startup events, are open to introductions, and are accessible, which is not necessarily true of other markets.
Germany has a stable, deliberate, political climate where things are well-planned and predictable. This is relevant because the political outlook has an impact on the everyday activities of business people in Germany.
Q: Is there a certain kind of company that Invest In Bavaria is focused on attracting, and what kinds of companies are interested in Bavaria?
A: Because of the industries that are based in Bavaria, there are certain kinds of companies that are a natural fit. These industries include:
- Aerospace & Navigation
- Automotive & Mobility
- Energy & Cleantech
- Finance & Insurance
- Industrial Automation
- Life Sciences & Healthcare
- Logistics
- New Materials
Q: Are there certain company sizes or startup stages that are more likely to be interested in Bavaria?
A: All types of companies are interested in Bavaria, from growth stage to large corporations in tech, industry and the life sciences. Most of them choose Bavaria because they want to be close to potential business clients and R&D partners. Bavaria is also an interesting location for startups – especially more B2B-oriented companies. With incubators and accelerators in Artificial Intelligence, Mobility, Biotech, Digital Health, Insurtech, and Retail, we see a lot of early stage startups moving into the region.
Q: Do certain types of companies have an advantage over others?
A: Not especially; we like to highlight and play to our strengths, but many successful companies interested in gaining traction in Western or Central Europe—and now any part of Europe given the impending BREXIT (the UK’s exit from the European Union)—are attractive for us. We do look for companies with a high ROI potential, meaning that the relationship with foreign investors is best when it is mutually beneficial.
Q: What services, incentives, and support do you offer companies considering Germany, and specifically, the State of Bavaria?
A: The EU has different rules for giving financial subsidies to large companies, SMEs, and startups. Most of the incentive programs that we offer on a state level are either for small and medium businesses & startups or for R&D projects.
The goal for most companies coming into Europe is to gain clients and partners. We help companies meet the right people for pilot projects or joint partnerships. We offer free-of-charge consultation and introductions to industry associations, research clusters and institutes, extend invitations to conferences, and provide connections to accelerators, incubators, and market-entry programs aimed at growth-stage companies. We also offer information on specific industries & incentive programs and help with finding office space or industrial sites.
Invest In Bavaria also has funds to help companies go to conferences and events in Bavaria and we are very interested in finding companies who would benefit. Not only do we offer complimentary tickets to various conferences, we will arrange introductions to global players in interested companies’ respective industries. We can also suggest conferences that are relevant to interested companies’ specific niche or stage and can easily attract companies that are interested to meet up-and-coming players in their field. In fact, the opportunity to meet the big players is greater than the cost of a week in Germany. Companies interested in expanding to Bavaria can make great contacts with companies looking to partner.
Q: What are some resources for people to learn more about Bavaria and what Invest in Bavaria has to offer SME’s?
A: Follow us on LinkedIn & Facebook to learn about our activities & events. Subscribe to our newsletter on our website and listen to our podcasts.
Some of the events where we can meet are:
- Startup Grind Global, February 12-14 – San Francisco, CA
- X4 Experience Management Summit – March 6-9, 2018 in Salt Lake City, UT
- SXSW Interactive – March 10-16, 2018 in Austin, Texas
- Games Developer Conference (GDC)– March 19-23, 2018 San Francisco, CA
- Techfest Northwest – April 5-6, 2018 in Portland, Oregon
- RSA Conference 2018 (Cyber & IT Security) in San Francisco, CA
- MAIFEST Mobility Edition, coming up on May 9, 2018 in Silicon Valley
- Bio International Convention, June 4-7, 2018 in Boston, MA
- New York Venture Summit, July 2018, New York City
- OktoberINVESTfest, October 18th, 2018 in New York City
- New England Venture Summit, December 2018, New England
The State of Bavaria in Germany offers startups and established companies alike many opportunities and significant reasons to consider the region for expansion. Invest in Bavaria is standing by and ready to assist you in a number of ways.
Would you like to request more information from Invest in Bavaria about the following?
- Foreign Direct Investment assistance
- Support Programs and Funding Programs
- Setting up a business in Bavaria
- Taxes in Bavaria
- Business clusters in Bavaria
- Co-working in Bavaria
- Other related business information
If so, use the Get More Information button below and Invest in Bavaria will be happy to provide you with additional resources.
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The US Invest in Bavaria team consists of:
James Mister, Manager Investment and Expansion at Bavarian U.S. Offices for Economic Development, West Coast
Antonia Zierer, Executive Director at Bavarian U.S. Offices for Economic Development, West Coast
Janet Danisman, Executive Director at Bavarian U.S. Offices for Economic Development, East Coast
Kristin Eckert, Manager Investment and Expansion at Bavarian U.S. Offices for Economic Development, East Coast
Resources:
The Globig Special Report – Doing Business In Munich provides an in-depth look at Munich from different perspectives, and includes Globig’s rating from 1 to 5 for each of the variables you might consider important for your business expansion to the city and surrounding area.
Deloitte – Tax & Investment in Germany
BCG Most Innovative companies (2018): 65% do business in Bavaria
